Sole trader, partnership or limited company for a roastery?
The structure decides who is liable when something goes wrong, how profits are taxed and how easy it is to bring in a partner or sell. A plain comparison for roastery founders.
6 min read Updated 9 October 2026
There is no single right answer, but a roastery has features that push many founders towards a limited company sooner than they would for a consultancy: expensive equipment, leases with personal exposure, stock bought on credit and a product liability risk. Take advice from an accountant on your own figures; this guide sets out the trade-offs.
The three common structures
| Sole trader | Partnership | Limited company | |
|---|---|---|---|
| Liability | Unlimited: you are the business | Unlimited, shared between partners | Limited to the company's assets, subject to any personal guarantees you sign |
| Setting up | Register for Self Assessment with HMRC | Register the partnership and each partner with HMRC | Incorporate at Companies House, register for Corporation Tax |
| Tax on profits | Income Tax and National Insurance on all profits | Each partner on their share | Corporation Tax on profits; you pay personal tax on salary and dividends you take |
| Admin | Lightest | Light, plus a partnership return | Annual accounts and confirmation statement at Companies House, directors' duties |
| Privacy | Private | Private | Accounts and directors are on the public register |
| Bringing in investors | Not possible as such | By changing the partnership | By issuing shares |
| Selling the business | Sell the assets | Sell the assets or your share | Sell the shares or the assets |
What matters most for a roastery
Liability is less limited than it looks
Landlords, equipment lessors and some green coffee suppliers ask directors of small companies for personal guarantees. A limited company still protects you from claims you did not guarantee, such as a product liability claim above your insurance or an unexpected debt, but read every guarantee before you sign it.
Tax
Corporation Tax is charged at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between. Sole traders pay Income Tax and Class 4 National Insurance on all profits whether or not they draw them. When a roastery reinvests heavily in equipment and stock, keeping profits in a company can help cash flow. Your accountant can model salary and dividend combinations; the rules and rates change, so check the current figures.
Credit and suppliers
Some trade suppliers and wholesale customers prefer to deal with a limited company, and a company with filed accounts can build its own credit history. Equally, a new company has no history, so expect to pay up front at first.
Practical steps
Whatever you choose
- Check the name is free at Companies House and as a trade mark, and that the domain is available
- Open a business bank account from day one, whatever the structure
- Agree in writing how co-founders split ownership, decisions and an exit (a shareholders' or partnership agreement)
- Register for VAT when required, or voluntarily if your customers are VAT-registered businesses
- Put leases, finance and supplier accounts in the business's name
Where Roastnet helps
Questions roasters ask
- Should a coffee roastery be a limited company?
- Many are, because of equipment, leases and product liability. A sole trader start is simpler and can be converted later. Take advice on your own numbers.
- How much does it cost to set up a limited company?
- Online incorporation at Companies House costs £50 (from 1 May 2024). Check the current fee on GOV.UK.
- Can I switch from sole trader to limited company later?
- Yes. You incorporate a company and transfer the business to it. Contracts, leases and VAT registration need updating.
Official sources
- GOV.UK: Set up a business: choose a structure
- GOV.UK: Corporation Tax rates and reliefs
- Companies House: Set up a limited company
Rules change. These sources were checked on 9 October 2026; always confirm the current position with the body that publishes them before you act.
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